Small Cap Feast

Small Cap Feast – 24 April 2019

Set Menu AIM:

Total number of AIM Companies (Incl Susp): 897

Total number of AIM Companies trading: 826*
* As at 12 April 2019

Set Menu NEX Growth:

Total number of NEX Growth Market Companies (Incl Susp): 89*

Total number of NEX Growth Market Companies trading: 87*
* As at 12 April 2019

Set Menu Standard List:

Total number of Standard List Companies (Incl Susp): 161*

Total number of Standard List Companies trading: 141*
* As at 12 April 2019

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

Main Market

Rustranscom plc— specialised rail freight transportation in Russia and Kazakhstan, announced its potential intention to conduct an IPO of GDRs. The GDRs are expected to be admitted to the Official List of the FCA and to trading on the main market of the LSE. Offering is expected to comprise predominantly primary shares, in the amount of circa $300m.

Finablr plc— global platform which provides Cross-Border Payments and Consumer Solutions, Consumer Foreign Exchange Solutions and B2B and Payment Technology Solutions to consumers and businesses in the large and growing payments and foreign exchange market is looking to list on the Main Market plans to raise $200m

Main Market (Standard)

IMC Exploration Group (NEX: IMCP), focused on acquiring and exploring prospecting licence areas which have high potential for natural resource, is looking to admit its shares to the standard list and will withdraw for the NEX Exchange. Expected 11 June 2019

Valeura Energy Inc (TSX:VLE), the upstream natural gas producer focused on appraising and developing an unconventional gas accumulation in the Thrace Basin of Turkey in partnership with Equinor is looking to join the standard list. No raise, expected market cap £146m and expected 25 April 2019

AIM

Techniplas –global  producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient.  FYDec17 rev $515m.

Loungers plc—the operator of 146 café/bar/restaurants across England and Wales under the Lounge and Cosy Club brands, announces its intention to seek admission on AIM, offer to raise £61.6m at 200p with market cap of £185m, expected 29 April 2019.

SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m

Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019.

Distribution Finance Capital Holdings plc — specialist lender which builds relationships with manufacturers and then provides working capital solutions up and down their supply chains to drive their growth is looking to join AIM. No raise, secondary offering of £19.8m at 90p, expected market cap of £95.98m. Expected 09 May 2019.

 

Breakfast Buffet

Beximco (BXP.L) 49p £190.6m

The fast-growing manufacturer of generic pharmaceutical products and active pharmaceutical ingredients, announced it has received FDA approval for anti-allergy drug Cyproheptadine Hydrochloride Tablet (4 mg), which is a generic equivalent to Periactin® Tablets (4 mg) from Merck and Company, Inc. Cyproheptadine  is an antihistamine used to relieve allergy symptoms such as hives, watery eyes, sneezing and itchy eyes or nose. The total US market for Cyproheptadine tablets was c. $16m.

In Aug 2016, Beximco Pharma became the first Bangladeshi pharmaceutical company to export medicine to the US market, following the approval of its oral solid dosage facility by the US FDA in June 2015. Cyproheptadine is now Beximco’s seventh Abbreviated New Drug Application (ANDA) approved for the US market.

 

Metals Exp (MTL.L) 0.82p £22.27m

Quarterly update on matters relating to the operations of its Runruno gold project in the Philippines.

14,892 oz of gold poured during the quarter.   

Key maintenance programmes have yet to commence due to working capital constraints, however, orders have been placed to begin mobile equipment rebuilds in Q2 2019.

Average mine gold grade was 1.54 grams/tonne against a budget of 1.70 grams/tonne.      Overall plant availability and gold recoveries remain a critical issue, with both measures well below the original feasibility studies.

Discussions with the Group’s lenders are ongoing to restructure the Group’s overall debt position.

A standstill from making principal and interest payments is currently in place until 2 May 2019.

New Management in place.

 

SysGroup (SYS.L) 39.5p £19.27m

FY Mar 19 trading update from the managed IT services and cloud hosting provider.

Both revenue and adjusted EBITDA will be in line with management’s expectations having grown by approximately 22% and 40% respectively since FY18. The results will underpin the Group’s stated strategy of focusing on the provision of end-to-end Managed IT Services with recurring revenue now representing approximately 74% of the Group’s total revenue.

The Group acquired Certus IT Limited towards the end of the period. Trading performance from Certus is in line with management’s expectations. The process of integration is now underway, and we expect Certus to be trading under the SysGroup brand later in the year.

 

Diurnal (DNL.L) 28.5p £16.66m

“Alkindi® (hydrocortisone granules in capsules for opening) has been granted Orphan Drug Designation in Australia by the Therapeutic Goods Administration (TGA) for the indication “replacement therapy of adrenal insufficiency (AI) in infants, children and adolescents (from birth to <18 years old)”. Orphan Drug Designation in Australia provides significant benefits, including waiver of application, evaluation and annual registration fees.”

Australia and New Zealand represent significant market opportunities for Diurnal, with around 1,750 patients in these territories suffering from paediatric AI and the genetic condition congenital adrenal hyperplasia (CAH), providing an estimated total market opportunity for Alkindi®and Chronocort® of approximately $10m per annum (USD).

 

IXICO (IXI.L) 27p £12.1m

The data analytics company delivering insights in neuroscience, announced that it has signed contracts with two biopharmaceutical companies to provide its technology-enabled imaging services to support an early phase study in Huntington’s Disease (HD) and a phase 3 study in another rare neurological disease. The contracts are both the first to be signed with these clients.

The HD contract has a total value of approximately £2m, which will be delivered over a seven-year term.

The second contract is with a company undergoing a phase 3 study in another rare neurological disease. This is initially a start-up agreement to enable IXICO to begin to deploy its services to the study which anticipates recruiting patients in June 2019.  A contract for the full study is expected to be completed in the coming months.

 

PetroNeft (PTR.L) 1.3p £7.99m

PetroNeft an oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 (the remaining 50% held by Arawak Energy), gave the following update in relation to reserves at its Licence 67.

New reserves approved for Licence 67, Cheremshanskoye field.

Approximately 19.26 mmbbls of C1 + C2 reserves (gross) for the Jurassic Reservoirs.

Currently examining development options for Licence 67.

Material additional exploration potential of the overlying Cretaceous section being studied.

Following on from the successful drilling on Licence 67 of the C-4 appraisal well on the northern part of the Cheremshanskoye field, PetroNeft has received approval from the State Reserves committee (GKZ) for C1 + C2 reserves of 2.5 Mtons (this is approximately equal to 2P reserves of 19.26 mmbbls).  The reserves approved are in the Upper Jurassic (J1) and Lower Jurassic (J14) intervals.

 

Biome Tech (BIOM.L) 380p £8.37m

“Biome Technologies, a leading bioplastics and radio frequency technology business, announced a trading update for the three months ended 31 March 2019.

Group revenues achieved for the first three months of the year were £2.1m, which is 11% ahead of the previous quarter (Q4 2018: £1.9m) and in line with those achieved in Q1 2018 (Q1 2018: £2.1m).

The Group made a small profit before interest, tax, depreciation, amortisation and share option charges in this quarter (based on unaudited management accounts).

The Group’s cash position as at 31 March 2019 was £2.1m (31 December 2018: £2.6m), reflecting working capital movements.

“2019 has commenced in an encouraging manner, particularly for the Bioplastics Division, and in line with the expectations set out in the Company’s preliminary results announcement.”

 

Shield Therapeutic (STX.L) 88.5p £97.5m

The commercial stage, pharmaceutical company with a focus on addressing iron deficiency with or without anaemia via its lead product Feraccru®, announced that the Swiss Agency for Therapeutic Products (Swissmedic) has approved a major extension of the approved indication for Feraccru® to now include treatment of all adults with iron deficiency (ID) with or without anaemia.

This follows an equivalent broadening of the marketing authorisation approval for Feraccru® in the European Union in 2018 and futher increases the commercial opportunity for Feraccru®, which was initially approved in both the EU and Switzerland just for the treatment of iron deficiency anemia (IDA) in adult patients with inflammatory bowel disease (IBD).

“Switzerland represents an attractive market opportunity as it is both well reimbursed and has a much higher level of treatment penetration compared to other markets, particularly for IV iron therapies. “

 

RTC Group (RTC.L) 63p £9.23m

AGM Statement from the  recruitment business.

“I am pleased to report that since publication of the 2018 results in Feb the Company has traded in line with expectations. Whilst there continues to be economic uncertainty, driven by Brexit, we continue to experience demand from both new and existing customers.

The Board remains cautiously confident of the trading prospects of the Company in the current financial year.”

 

Trafalgar Property Group (TRAF.L) 0.65p £2.76m

The residential and assisted living property developer, announced that “Trafalgar Retirement+ Limited, through its new wholly owned subsidiary, Randell House Limited, has exchanged contracts to acquire its first site for the development of an assisted living scheme for £2.3m. 

The Acquisition is a 1.3 acre site in Camberley, Surrey, currently consisting of a former nursing home and with an estimated site value of £2.95m. The site has planning permission for the demolition of all buildings and for the development of 37 two-bedroom units for an extra care and assisted living scheme, which Retirement+ estimates has a Gross Development Value (“GDV”) of £15.1m, with a variation option for an additional 15 units (subject to planning permission), with a consequent GDV estimate of £21.2m.”

Randell House intends to develop the units for purchase by owners, who would then receive care in their own homes.  Owners will also benefit from other on-site services such as catering, health and wellness, cleaning and communal living spaces.

The acquisition and costs with costs will be financed by a loan of £360k from Chris Johnson, CEO of the Company and the balance being provided by a lending institution, for which offers have been received and the terms of which are due to be finalised during the eight week completion period for the Acquisition.

 

Head Chef:

Derren Nathan
0203 764 2344
derren.nathan@hybridan.com

*A corporate client of Hybridan LLP

Disclaimer

This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to any such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific person or entity and is not a personal recommendation to any such person or entity. Recipients should reach an individual investment decision, based upon their respective financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor.

The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.

The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).

Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.

This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.

In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.

This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.

MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of the MIFID II Regulation.

Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.